3 Things to Ask Accountants before Buying a Dental Practice
Buying a dental practice is a better business move than starting from scratch. However, aside from deciding which dental practice to purchase, there are more things to consider, including the business’s legality. Therefore, working with an advisory team should help you better process things and comply with legal requirements. But what should people ask accountants before buying a dental practice? Here are some ideas.
1. Which Financial Documents Do I Need?
In any dental practice transaction, you need to see the financial records to gauge the business’s overall health, including bank statements, profit and loss statements, balance sheets, and tax returns. Also, you need to ask the seller to provide you with a list of the dental practice’s current assets and liabilities.
Looking for the necessary financial documents should help provide a glimpse of how well a dental practice is doing before purchasing it. In other instances, requiring the owner to submit the papers should help make the purchase easier. It also helps in knowing which documents the new owners should produce moving forward in compliance with government rules.
2. What Is Your Evaluation of the Financial Documents?
Once you have the financial documents, you should have an expert take a look to see what they recommend. While you could look at them yourself, you may not know what you are getting because the language is confusing. It is essential to get a professional opinion before you make a purchase.
It is also an ideal time to look at the history of dental practice. Is the business sustainable or not? Are there other requirements missing that need requesting? Meanwhile, also take the opportunity to review the current status of the dental practices thoroughly. Asking for help from professional accountants should provide answers to help make a decision.
3. What Are the Financial Risks?
As with any business, the possibility of financial risks is present. Buying a dental practice can be a nightmare if the financial stakes are not considered. Therefore, hiring an accountant is the best way to prevent financial risks. Accountants should help buyers assess if the dental practice they have their eyes on is worth purchasing or risking. Through proper analysis and background checking, buyers should save more in hiring an accountant than buying the business blindly.
How to Determine Which CPA to Hire?
The best way to determine which CPA to hire is to ask for referrals from family and friends. If you have a dentist friend, ask them for referrals as they have connections with accountants. If you cannot get referrals from your friends, you can directly contact the CPA firms in your area.
Once you have the contact number of the CPA firm, call and ask if they can do a business valuation. Do not forget to ask the accountants if they can do a market analysis and if they can give you tips on how to get dental practices at a reasonable price.
You should also ask the CPAs how they will be paid. Some CPAs may charge you by the hour, while others may charge a flat rate. While some CPA firms charge by the hour, hiring them is not ideal unless you know they can finish their work quickly. If the CPA firm charges a flat rate, inquire about their fees. If you feel that the prices are reasonable, you can hire them.
Conclusion
Before buying a dental practice, you should consider finding a CPA firm to help you. A CPA firm can help you determine if the price you are paying for the practice is reasonable. They can help you look through financial statements and help you decide whether you are getting a good deal.
Ash Dental CPA is one of the best dental consulting firms in Massachusetts, providing dental bookkeeping and accounting services to dental and healthcare professionals in the area. We aim to assist clients in the medical field, making it easier for them to manage their finances. Book a dental CPA near you today by visiting our website.
